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Madhya Pradesh High Court · body

1970 DIGILAW 136 (MP)

Indore Zila Sahkari Bhumivikas Bank Maryadit, Indore v. Registrar, Cooperative Societies, Indore

1970-11-06

G.L.OZA, S.P.BHARGAVA

body1970
ORDER G.L. Oza, J. 1. This is a petition filed by the petitioner against an order passed by the respondent number 1 on 8th September 1970. 2. The petitioner is a co operative society functioning under the Madhya Pradesh Co-operative Societies Act, 1960 (hereinafter called the Act) and is registered under that Act as a Co-operative Bank. According to the petitioner, under section 49(b) of the Act, the society is to elect its Board of Directors in accordance with the procedure laid down in rule 41 of the rules framed under the Act. These elections are held under the supervision of Returning Officer appointed under rule 41 (26). In the present case, the Collector was appointed as a returning officer who delegated his powers to a Deputy Collector. It is alleged that under the provisions contained in section 49, the general body of the society also elects delegates for representing the petitioner-Bank in other societies. In order, therefore, to elect its four delegates to represent the petitioner-Bank at the M. P. State Co-operative Bank Ltd., Bhopal, M. P. State Coperative Union, Jabalpur, Premier Co-operative Bank Ltd Indore and the district Cooperative Union Indore a meeting of the general body was held on 23rd August. 1970, where four delegates as mentioned below were elected: 1. Shri Shivshankar Patel to represent in M.P. State Co-operative Bank Ltd., Bhopal. 2. Babusingh Mandtoi to represent in M.P. State Co-operative Union, Jabalpur. 3. Govind Onkar to represent in Premier Co-operative Bank Ltd., Indore. 4. VijayasenWagh to represent in District Co-operative Bank Union. After the said-election, information about the election of these delegates was sent to the respective societies on 26th August 1970. On 11th September 1970, according to the petitioner, it received a stay order dated the 8th September 1970 from the respondent No. 1 Deputy Registrar, Co-operative Societies, directing that the operation of the election of the said delegates be stayed and further restraining them from representing the petitioner Bank in various societies. The respondent No. 1 passed this order on a dispute filed before him by the respondent No. 2 under section 64 of the Act. The respondent No. 1 passed this order on a dispute filed before him by the respondent No. 2 under section 64 of the Act. The petitioner contended that the dispute filed by respondent No. 2 about the election of the delegates would not fall within the ambit of 'dispute' as contemplated under section, 64 and consequently the respondent No. 1 had no jurisdiction to entertain the dispute and pass an order of this kind. It was also contended in the petition that the stay order was passed ex parte without giving any opportunity to the petitioner. 3. In his return, the respondent No. 1 has contended that the dispute raised by the respondent No. 2 about the election of delegates, falls within the ambit of 'dispute' under section 64 of the Act and, therefore, confers jurisdiction or the respondent No. 1 to entertain it. It is also contended that under section 67 of the Act the respondent is competent to pass interlocutory orders even by way of injunction. It was also contended in the return, filed on 2nd November 1970, that after hearing the parties the respondent No. 1 has confirmed the order of temporary injunction, passed on 8th September 1970, by pasting an order on 2nd November 1970 itself. 4. Shri A.M. Mathur, Learned Counsel for the petitioner, contended that the dispute filed by the respondent No. 2 about the election of delegates to represent the petitioner in various societies could only be said to fall within the ambit of clause (v) of section 64(2) of the Act. He contended that clause (v) pertained to 'election of any officer of the society'. The word 'officer' has been defined in section 2(u) of the Act, and, according to the Learned Counsel, in view of that definition it was clear that the delegates so elected to represent the petitioner Bank in various societies could not be said to be 'officer, and consequently the dispute filed by the respondent No. 2 could not be said to be a dispute falling within the ambit of section 64. Learned Counsel further contended that, therefore, the respondent No. 1 had no jurisdiction even to entertain the dispute and consequently the order of injunction passed by the respondent No. 1 on 8th September 1970 was absolutely without jurisdiction and deserved to be set aside. Learned Counsel further contended that, therefore, the respondent No. 1 had no jurisdiction even to entertain the dispute and consequently the order of injunction passed by the respondent No. 1 on 8th September 1970 was absolutely without jurisdiction and deserved to be set aside. In the alternative, Learned Counsel contended that section 67 of the Act, which empowers the respondent No. 1 to pass interlocutory orders, clearly states that while passing such orders the procedure as laid down in the Code of Civil procedure shall be followed and, therefore the respondent No. 1 was bound to follow the procedure as contemplated under section 39 before granting a temporary injunction. Learned Counsel contended that for that purpose the respondent No. 1 had to determine the question of prima facie case, balance of convenience and irrepairable injury, and that without giving any finding on any of these basic ingredients for a grant of temporary injunction, the order passed by the respondent No. 1 was beyond the jurisdiction conferred under section 67 of the Act. He also contended that it was known that in a petition where election of an elected representative is challenged no injunction could be granted restraining the elected representative to function as it could not be said that such functioning would result in any irrepairable injury to the petitioner who comes forward to challenge the election. In these circumstances according to the Learned Counsel, the order passed by the respondent No. 1 deserved to be quashed. 5. Learned Government Advocate for the respondent No. 1 contended that the order in question is an interlocutory ex-parte order and after the passing of that order and during the pendency of this petition the respondent No. 1 has on 2nd November 1970 passed an order confirming the temporary injunction granted by him after hearing the parties. He, therefore, contended that the order dated the 8th September 1970 no longer exists as a substantial order which could be challenged in this petition, He also contended that as regards the jurisdiction of the respondent No. 1 to entertain the dispute, the respondent No. 1 has given in his order dated the 2nd November 1970 his own reasons. He, therefore, contended that the order dated the 8th September 1970 no longer exists as a substantial order which could be challenged in this petition, He also contended that as regards the jurisdiction of the respondent No. 1 to entertain the dispute, the respondent No. 1 has given in his order dated the 2nd November 1970 his own reasons. According to him, there is a hierarchy of authorities constituted under the Act, and, therefore, those authorities should be allowed to interpret the provisions contained in section 64 coupled with the provisions of section 1(u) of the Act and this Court need not interfere at this stage. He also contended that the petitioner rushed to this Court when only an interlocutory order was made and the proceedings are yet pending before the respondent No. I and in these circumstances this Court need not entertain this petition. 6. Learned Government Advocate also contended that in the definition of 'Officer' under section 2(u), the clause "to give directions in regard to the business of such society" does not qualify "any other person elected" but only qualifies the person " appointed" and that therefore, at the present dispute pertains to elected representatives it would fall under section 64(2) and the respondent No. 1 had jurisdiction to entertain the dispute. He frankly con ceded that if at all this dispute could confer jurisdiction under section 64, it could do so only under section 64(2)(v) of the Act. 7. Shri Chhazed, Learned Counsel for the respondent No. 2, contended that whether or not the dispute falls within the ambit of section 64 and whether or not the election of the delegates would fall within the scopes of the definition of the word 'Officer' given in the section 2(u) are matters which could only be decided on full facts. He, however, frankly conceded that the petitioner stated its case in the petition and respondent No. 2 as well as the respondent No. 1 have filed their returns and in their returns it has not been stated that under any rules or byelaws of the petitioner Bank the delegates so elected have any authority or duty to give directions regarding business as contemplated in the definition in section 2(u) of 'the Act. Even during the course of arguments, neither the Government Advocate for Shri Chhazed could point out any prevision in the or byelaws to indicate that a delegate elected as in the present case has any duty or authority to give directions in regard to the business of the society. 8. Learned Government advocate, appearing for the respondent No. 1 also contended that the petition has been filed on behalf of the petitioner Bank and the President has signed it, but no resolution of the bank has been filed to indicate that its President was authorised to file the petition, although in the return it has not been contended that the petitioner Bank did not authorise the President to file this petition. On the contrary, along with the return a copy of the resolution, (Annexure VII) is filed which authorises expenditure of Rs.1,500/- to take legal steps against the order passed by the respondent No. 1 staying the operation of the election of delegates. 9. As regards the objection about the petitioner filing the petition through its President, the objection raised by the learned Government advocate does not appear to have any substance. The petitioner is a coperative society and the petition has been signed by its President. It is not specifically stated in the return that the petitioner-society did not decide to file the petition. On the contrary the resolution filed along with the return clearly goes to show that it was decided to take further legal action in the matter of stay order passed by the respondent No. 1. In these circumstances, it cannot be said that the petition has been filed on behalf of the petitioner-society without its authority. 10. As regards the objection of the learned Government advocate that the order against which this petition has been filed is an interlocutory exparte order passed on 8th September 1970 and as that order has now been confirmed by the respondent No. 1 by his order dated the 2nd November 1970 this petition cannot be entertained, this contention would have in fact carried some weight, if the question of jurisdiction of the respondent No. 1 would not have been raised before us. It cannot be doubted that if the respondent No. 1 had no jurisdiction to entertain the dispute filed by the respondent No. 2 then on the mere ground that the exparte order of 8th September 1970 has been confirmed by a subsequent order this petition cannot be dismissed. 11. The other contention raised by the learned Government advocate about the interpretion of section 2(u) cannot also be accepted as it involves the question about jurisdiction of the respondent No. 1 to entertain the dispute itself. 12. Consequently, the basic question that deserves consideration in this petition is about the jurisdiction of the respondent No. 1 to entertain the dispute filed by the respondent No.2. 13. It is not disputed that the respondent No. 2 filed the dispute challenging the election by the resolution of petitioner-Bank dated the 23rd August 1970. This election pertained to delegates to represent the Bank in the respective societies as stated above. Therefore, this is a dispute about the election of delegates of the petitioner-Bank to represent it in the respective societies. It is also not disputed that if this dispute falls within the ambit of section 64, then it would only be under clause (v) of section 64(2). Section 64 reads thus-64 (1) Notwithstanding anything contained in any other law for the time being in force any dispute touching the constitution, management or business of a society or the liquidation of a society shall be referred to the Registrar by any of the parties to the dispute if the parties thereto are among the following : (a) a society, its committee, and past committee, any past or present officer any past or present agent, any past or present servant or a nominee, heirs, or legal representatives of any deceased officer, deceased agent or deceased servant of the society or the liquidator of the society. (b) a member, past member or a person claiming through a member, past member or deceased member of a society or of a society which is a member of the society; (c) a person other than a member of the society who has been granted a loan by the society or with whom the society has or had business transactions and any person through such a person; (d) a surety of a member, past member of deceased member or a person other than a member who has been granted a loan by the society whether such a surety is or is not a member of the society; (e) any other society or the liquidator of such a society; and (f) a creditor of a society. (2) For the purposes of sub-section (1), as dispute shall include- (i) a claim by society for any debt or demand due to it from a member, past member or the nominee, heir or legal representative of a deceased member, whether such debt or demand be admitted or not; (ii) any claim by a surety against the principal debtor where the society has recovered from the surety any amount in respect of any debt or demand due to it from the principal debtor as a result of the default of the principal debtor, whether such debt or demand be admitted or not; (iii) a claim by a society for any loss caused to it by a member, past member or deceased member, any officer, past officer or deceased officer, any agent, past agent or deceased agent or any servant, past servant or deceased servant, or its committee, past or present whether such loss be admitted or not; (iv) a question regarding rights, etc., including tenancy fights between a housing society and its tenants or members; and (v) any dispute arising in connection with the election of any officer of the society (3) If any question arises whether a dispute referred to the Registrar is a dispute, the decision thereon of the Registrar shall be final and shall not be called in question in any Court. Sub-section (1) of section 64 clearly lays down that any "dispute touching the constitution, management or business of a society," will be a dispute as contemplated in this provision. Sub-section (1) of section 64 clearly lays down that any "dispute touching the constitution, management or business of a society," will be a dispute as contemplated in this provision. The present dispute being a dispute pertaining to the election of delegates, it cannot be a dispute pertaining to the constitution, management or business of the society as contemplated in sub-section (1). The election that is challenged is not of any of the office bearers of the society because in that event it will come within the scope of "constitution" of the society. In these circumstances, the language contained in section 64(1) clearly indicates that if the dispute about election is to be brought within the mischief of section 64, it must be a dispute touching the "constitution" of the society itself. Sub-section (2) of section 64 further indicates that for the purposes of sub-section (1) a dispute shall include that which is provided in it. The use of the language clearly shows that what has been enacted in sub-section (2) is only a further illustration of what dispute could be. In clause (v) of subsection (2), it has been provided that a dispute in connection with the election of any officer of the society will be a dispute for the purposes of sub-section (1) of section 64. Therefore, the provision contained in clause (v) of section 64(2) clearly indicates that the dispute must be one touching the constitution if it is to be a dispute regarding election. In these circumstances, it cannot be doubted that under section 64 a dispute about election is contemplated when it falls within anyone of the heads contained in sub-section (1), that is, constitution, management, business or liquidation of society'. 14. In clause (v) of sub-section (2) of section 64, it has been stated that election of an officer of the society would be a dispute falling within the ambit of section 64. The word 'officer' has been defined in section 2(u) of the Act as under:- 'Officer' means a person elected or appointed by a Society according to its bye-laws to any office of such society and includes a Chairman, Vice Chairman, President, Vice President, Managing Director, Manager, Secretary, Treasurer, Member of the Committee and any other person elected or appointed under this Act, the rules or the bye-laws to give directions in regard to the business of such society. This definition clearly indicates that an officer mean as a person who holds any of the offices enumerated in the definition or any other person elected or appointed under the Act rules or byelaw. But regarding 'any other person', it has further been provided that such person should be elected or appointed to give directions in regard to the business of the society. Admittedly, the delegates, whose election is being challenged by respondent No. 2, would not fall within the ambit of any the office bearers of the society. As best, they could fall within the phrase 'any other person elected or appointed'. As already stated above, there is admittedly no rule or bye-laws under which these delegates have the authority or duty to give directions to in regard to the business of the society. Consequently by any stretch of the language of section 2(u), it cannot be contended that these delegates could fail within the ambit of the term 'officer'. This also appears to be logical in view of the language contained in section 64(1) that the dispute falling within the scope of section 64 and, therefore, the respondent No. I, had no jurisdiction at all to entertain the dispute. 15. Learned Counsel for the petitioner has also referred to certain decisions about the interpretation of the word 'officer' contained in the respective provisions of the Act. But the definition, as it stands, clearly rules out any possibility of holding that the delegates so elected could be said to be officers. In this view, the respondent No. 1st taking cognizance of the dispute filed by the respondent No. 1 is itself beyond its jurisdiction. 16. In view of the fact that the respondent No. 1 has no jurisdiction at all to entertain the dispute filed by the respondent No. 2, it cannot be doubted that he had no jurisdiction to pass any order under section 67 of the Act; and in view of the fact that the respondent No. 1, had no jurisdiction to entertain the dispute itself, the question that he subsequently passed an order confirming his earlier order is of no consequence. 17. 17. Learned Government advocate's objection that there is a hierarchy of authorities provided in the Act and they should be allowed to interpret the provisions and this Court need not examine this question at this stage, in substance amounts to the objection that in view of the alternative remedy this petition should not be entertained. It cannot be doubted that the presence of an alternative remedy alone would not disentitle the petitioner from getting relief under article 226 of the Constitution. It is also not brought out that the alternative remedy available to the petitioner is efficacious On the contrary, it is apparent that the alternative remedy would not be adequate. In the face of an order whereby the elected representatives have been restrained from functioning as such, it can not be said that this is not a fit case where the petition under Article 226 should not be entertained. 18. Consequently, the petition is allowed, the order passed by the respondent No. 1 on 8th September 1970 and the subsequent orders passed by him are quashed as the respondent No. 1 had no jurisdiction to entertain the dispute filed by the respondent No. 2. The petitioner shall get costs of this petition from the respondents Nos. 1 and 2 equally. Counsel's fee is fixed at Rs.200, if certified. The outstanding amount of security deposit shall be refunded to the petitioner.